DOJ Approves Modified Ticketmaster, Live Nation Merger

The United States Department of Justice, after a year’s worth of investigation, approved the proposed merger between Live Nation and Ticketmaster on Monday — with strings attached.

First, Ticketmaster will have to license a copy of its ticketing software to two companies — Anschutz Entertainment Group (AEG) and either Comcast-Spectacor or another “suitable” company — so that both companies can compete “head-to-head” with Ticketmaster for venues’ business. After five years, AEG will have the option of buying the software, replacing it with something else or partnering with another ticketing company.

“The merger, as originally proposed, would have substantially lessened competition for primary ticketing in the United States, resulting in higher prices and less innovation for consumers,” reads the DOJ’s announcement. Christine Varney, the assistant attorney general heading the DOJ’s antitrust division, and who insiders say opposed the original plan, says the new proposed agreement allows Live Nation and Ticketmaster to merge without creating those antitrust issues.

“The Department of Justice’s proposed remedy promotes robust competition for primary ticketing services and preserves incentives for competitors to innovate and discount, which will benefit consumers,” she said. “[It] allows for strong competitors to Ticketmaster, allowing concert venues to have more and better choices for their ticketing needs, and provides for anti-retaliation provisions, which will keep the merged company in check.”

In addition to licensing its ticketing software to competitors, Ticketmaster must sell its Paciola ticketing company to either Comcast-Spectacor or another suitable company. According to the DOJ, these moves will recreate the level of competition that existed in the live music marketplace before the merger of Live Nation and Ticketmaster.

To prevent this merged entity from bullying venues into using its service over those of the competition — for example, by withholding (former) Live Nation artists from venues who don’t use (the former) Ticketmaster for ticketing — the settlement dictates that “the merged firm will be forbidden from retaliating against any venue owner that chooses to use another company’s ticketing services or another company’s promotional services, including restrictions on anti-competitive bundling.”

These policies address the main problems that have been raised with the merger; enforcing them is a different matter. Assistant attorney general Christine Varney later addressed the issue of enforcement in a statement (updated). “I can assure you we will be vigilant in our enforcement of these provisions,” reads the statement, “and our strict enforcement should give AEG, Comcast-Spectacor, and others in the industry the confidence they need to make business decisions that maximize competition on the merits without fear of retaliation.” Several DOJ employees will apparently be assigned to investigating allegations of anti-competitive behavior by the merged company, should they arise.

Live Nation trumpeted the DOJ’s announcement as a victory: “This is a good and exciting day for the music business, and we are close to finalizing the creation of a new company that will seek to transform the way artists distribute their content and fans can access that content.” As expected, Live Nation and Ticketmaster will follow the DOJ’s requirements and merge.

So, what will we call this new company? Given the dismal associations of the Ticketmaster brand, it should come as no shock that the new company will be called “Live Nation Entertainment.”